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order and pass it on to a Teletype operator or other input staff person, who will then send it to the floor of the appropriate exchange or to a Nasdaq order entry clerk for execution. In a few minutes the customer will receive an execution showing either the number of shares and price or a "nothing done," indicating the order did not get executed. |
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This type of delay is intolerable to the DAET trader. When a DAET trader enters an order, the trader expects it to be completed instantaneously. This is the amount of time a typical order executed through a first-class trading system should take to be executedno ifs, ands, or buts. The DAET trader, for better or worse, always has hands-on control over his or her securities positions. |
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DAET involves intensive tape watching, but not in the conventional sense. Due to the rules of the Nasdaq market, all market makers in a particular stock electronically publish their current quotations on the Level II screen. Each quotation posted by a market-making dealer in a Nasdaq stock must contain the bid price (the price at which the dealer is willing to purchase shares), the offered price (the price at which the dealer is willing to sell shares), and the minimum stated size (usually 1000 shares) at which the stock must trade. |
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Your computerized access trading system should be the latest-generation, most effective, and most advanced medium for DAET because, among other reasons, it will give you superfast access to the other computer systems necessary to enable you to directly compete in the marketplace. You shouldn't skimp on the cost of a system. Get one that provides the best available information of vital need to DAET and access to Nasdaq and listed markets. |
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Nasdaq Level II Day Trading Screen |
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Chart 1-1 shows a Nasdaq Level II screen with some of the features available to traders on a typical DAET computer screen. |
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The TICKER at the top left corner shows those stocks the trader desires to see, and identifies market makers who have changed the inside price (color-coded in real life |
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